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Since the beginning of June, a shortage of drivers has led to a surge in demand an a 40% increase in price for ridesharing services like Uber and Lyft as COVID-19 restrictions eased.

Credit: Keyu Lu

Prices for ridesharing services in Philadelphia have increased by 40% as demand has soared and COVID-19 restrictions have eased.

Since the beginning of June, a shortage of drivers has led to a surge in demand for ridesharing services like Uber and Lyft, 6ABC reported. As Philadelphia’s economy begins to return to normal, ridesharing services have become as popular as they once were before the pandemic, causing a spike in prices.

Mauro Guillén, the Dr. Felix Zandman Professor Emeritus of Management at the Wharton School, said that the driver shortage is the result of multiple factors. While some former drivers are taking advantage of higher earnings at different gigs, others are still hesitant to share an enclosed space with a passenger due to COVID-19 concerns.

“The labor market is tight,” Guillén said. 

To attract new drivers, Uber announced in April that it would launch a $250 million driver stimulus program, noting that the median hourly wage for a part-time driver in Philadelphia before the stimulus program was almost 5 times higher than Pennsylvania’s minimum wage.

Professor of Sociology and Communication David Grazian added that the increase in prices and demand might also be related to the greedy company practices of ridesharing services. Ridesharing services are sensitive to demand increases because of the microdata they collect on their business operations, meaning they “are not shy about ratcheting up their prices when it suits them,” Grazian said. 

Due to COVID-19 restrictions having been eased considerably since the spring, the increase in demand is only temporary, Grazian said, as people are just now moving within Philadelphia at full force, in response to the loneliness of the COVID-19 lockdown in 2020.

“Locals are [now] more desperate than ever to experience the public life of the city as well as see friends and family in person," he said. "Rapacious companies like Lyft and Uber are able to exploit this emergent enthusiasm."

According to the United States Bureau of Labor Statistics, the unemployment rate in Philadelphia during June 2021 was 9.4%. At the height of the pandemic in July 2020, the unemployment rate was 19.5%.

Over half of all Philadelphia residents are fully vaccinated against COVID-19, according to the Philadelphia Department of Public Health. On July 27, the Centers for Disease Control and Prevention recommended that fully vaccinated people wear masks in areas of high community transmission when indoors. Philadelphia County’s community transmission rate was “moderate” for the week ending July 26.